Doing business in China and how to protect your products. Wednesday 28th May 2014

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1 Doing business in China and how to protect your products Wednesday 28th May 2014

2 Marten van Hasselt Senior Associate Expertise: Intellectual Property Business and contract law Litigation

3 Mission of today s seminar 3

4 A brilliant idea and what s next? 4

5 The importance of Intellectual Property! Intellectual Property: - protects creations of the mind - only exists by law - enables exclusive rights - is of commercial value - enables legal means to take action against copycats and infringers It is also a property right which can be sold, bought, licensed, valued etcetera

6 Innovation and protection Step by step Thoughts - Can not be protected idea - Right down, save and/or file (e.g. I-depot or notarial deed) - Treat it as confidential information! concept production - Time to market or time to protect your IP? - Check what is available (trademarks, names, patents etc) or already taken - Decide on your territory, markets opportunities, business model etcetera - Take care of confidentiality and IP of third parties (freelancers, investors etc) - Register IP and/or take care of transfer of IP according to your plans - Take care or agreements: manufactures, licensees, (re) sellers, agents etc. market Fruytier Friends in Business

7 i-depot What is an i-depot? The i-depot is a legal means of proof that issues a date stamp for your idea or creation similar to a day stamp issued by the tax authorities or placed on a notarial deed. It can be used to file an idea, concept, design, invention, model, musical composition, film script or prototype. Having evidence of existence can protect you in the event of a dispute. However, an i-depot does not protect your idea The i-depot does not offer (intellectual) property rights and does not offer legal protection. Advantage: proof of existence Disadvantage: no proof of IP Costs: 45,= per depot / 5 years period Fruytier Friends in Business

8 IP overview The main types of IP are: - Copyright protects literary and artistic works - Designs protect the appearance (objects) - Trade Marks protect marks identifying trade origin (likelihood of confusion) - Patents protect technological inventions Also: plant variety rights, related rights, data protection etcetera Parallel rights : - Trade name: name used to identify the company - Domain name: online excess to website / also trade mark and/or trade name - Confidential information: no legal status but important in agreements, correspondence Registration by law First come, firts serve Trade marks Designs Patent Domain names No registration (required) Copyright Trade names Unregistered designs Confidentional information

9 Do s and don ts 9

10 Do s and don ts Trademark mistakes Fiat Uno Nescafé uno means loser in Finish means no coffee in Portuguese Ikea had to change the product names Fartfull, Jerker and Fukta for the UK market Nigiria and Gazprom came up with the name Nigaz Chinese market Quaker was named Lǎorénpái in China which means old men s name. Ralph Lauren got know in China as Sānjiǎomǎ, which means horse with 3 legs Peugeot picked the name Biāozhì, which means beautiful but is pronounced almost like biǎo zi, which means prostitute in Chinese. 10

11 Types of distribution Types of distribution: The producer / manufacturer / IP owner has to decide on the appropriate business channel: Direct sales Agency Distribution full control and maximum profits but also full responsibility and burden of organization agent arranges the sales based on commission (territory, authorization, goodwill upon termination, exclusivity etcetera.) intensive, selective or exclusive (territory, IP license, use of marketing, stock upon termination, minimum sales etcetera) Fruytier Friends in Business

12 Innovation and protection Step by step Thoughts - Can not be protected idea - Right down, save and/or file (e.g. I-depot or notarial deed) - Treat it as confidential information! concept production - Time to market or time to protect your IP? - Check what is available (trademarks, names, patents etc) or already taken - Decide on your territory, markets opportunities, business model etcetera - Take care of confidentiality and IP of third parties (freelancers, investors etc) - Register IP and/or take care of transfer of IP according to your plans - Take care or agreements: manufactures, licensees, (re) sellers, agents etc. market Fruytier Friends in Business

13 A true Dutch story how it all started senz was born out of pure frustration with traditional umbrellas. You're probably very familiar with all of the well known umbrella struggles yourself: Umbrellas go inside-out, break, poke you in the eye, limit your visibility, don't protect your back, etc. Today, some 3400 years after its invention in Egypt, the umbrella is basically regarded as a necessary evil that everybody all over the world dislikes. The story of senz goes back to the fall of 2004, when a young and naïve Industrial Design Engineering student, Gerwin Hoogendoorn, experienced one week in which three of his umbrellas broke down. Being sick and tired of the massive amount of crappy umbrellas, he decided to devote his graduation project to designing the ultimate umbrella: One design that resolves all of those nasty umbrella frustrations. 13

14 IP portfolio 14

15 Australia & New Zealand senz distribution Co Australia & NZ PTY Ltd Benelux & Duitsland (retailers only) senz umbrellas bv Distribution channel Senz Benelux (only design retailers within the Benelux) InZicht BVBA Colombia Finland France Greece Italy Japan Russia South Korea Spain Switzerland Taiwan Turkey Uruguay Fruytier Friends in Business

16 Guard the ownership of your IP Who owns what? IP rights and there protection depend on ownership. Ownership of patents and copyrights initially resides with the inventor / author and must be assigned to a company. Works made for hire (e.g. copyrights on website design or artwork) are of special interest because paying for works does not imply legal transfer of IP. Employee agreements and IP law may be sufficient but formal assignments pertaining to the intellectual property is preferable (e.g. employment agency, pay rolling). Use the proper legal means and forms to transfer IP Check with your accountant how IP is valued and if fiscal options are used (e.g. innovation box). Also: Check from time to time if all IP is registered and owned by the company. IP is often forgotten when there is a change (take over, change of entity, new holding, domain names registered by the founder, new or ended licenses etc.) 16

17 When going abroad Once your IP in the Netherlands and abroad is order: remain focused! Check with insurance company if your foreign business is covered Check who you are dealing with before exchanging information Hire local advisors such as attorneys and translators Use NDA s and confidentiality agreements Check prototypes and agree on the golden sample Use spec sheets and clear definitions (standards, measures, materials etc.) Arrange for During Production Checks and/or Pre-Shipment Inspection AND Listen carefully to what Henry Liao has to say after the break. 17

18 Feedback, questions or suggestions? B.V. Keizersgracht GD Amsterdam The Netherlands P. +31 (0) F. +31 (0) E. 18

19 invites you for Dutch drinks and Chinese food! 19

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